Clean Harbors (CLH) AI Stock Analysis

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Clean Harbors

(NYSE:CLH)

70Outperform

Clean Harbors has a strong financial foundation with robust growth and effective leverage management, contributing positively to its score. Despite these strengths, technical indicators reflect a bearish trend, and the valuation suggests the stock may be overvalued. The earnings call provides a positive outlook, but challenges in the SKSS segment and higher costs warrant attention. Overall, the stock is positioned well within its industry but faces some near-term headwinds.

Positive Factors

Financial Performance

CLH posted a strong Q4 led by a 2% EBITDA beat and free cash flow that was 27% above consensus.

Industrial Activity Outlook

Clean Harbors is well-positioned to benefit from an improving outlook for industrial activity and reshoring activities in the U.S.

Negative Factors

Base Oil Prices

Challenging backdrop for SKSS as base oil prices have declined, impacting the realized prices for its re-refined product.

Guidance and Weather Impact

The company blamed winter weather for weak 1Q guidance, leading to uncertainty and investor concern.

Clean Harbors (CLH) vs. S&P 500 (SPY)

Market Cap

$10.45B

Dividend YieldN/A

Average Volume (3M)533.93K

Price to Earnings (P/E)27.0

Beta (1Y)0.90

Revenue Growth8.89%

EPS Growth6.76%

CountryUS

Employees22,796

SectorIndustrials

Sector Strength70

IndustryWaste Management

Share Statistics

EPS (TTM)7.42

Shares Outstanding53,856,834

10 Day Avg. Volume627,041

30 Day Avg. Volume533,929

Financial Highlights & Ratios

PEG Ratio3.99

Price to Book (P/B)N/A

Price to Sales (P/S)1.80

Price to Cash Flow (P/CF)8.70

P/FCF Ratio8.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$265.22

Price Target Upside32.41% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

Clean Harbors Business Overview & Revenue Model

Company DescriptionClean Harbors, Inc. (CLH) is a leading provider of environmental, energy, and industrial services throughout North America. The company operates in various sectors, including hazardous waste management, environmental cleanup, and industrial maintenance. With a commitment to sustainability and safety, Clean Harbors offers a comprehensive suite of solutions, such as waste disposal, recycling, emergency spill response, and industrial cleaning and maintenance services, catering to a diverse range of industries including manufacturing, oil and gas, and government agencies.

How the Company Makes MoneyClean Harbors makes money through its extensive range of environmental and industrial services. Key revenue streams include hazardous waste management, where the company profits from the collection, transportation, treatment, and disposal of hazardous materials. Additionally, Clean Harbors generates income from its industrial services, which include high-pressure cleaning, equipment maintenance, and facility decontamination. The company also offers emergency response services for environmental incidents, earning fees for rapid deployment and remediation efforts. Significant partnerships with industrial clients and government contracts further contribute to the company's earnings by ensuring a steady demand for its specialized services. Clean Harbors' strategic focus on sustainability and regulatory compliance positions it as a trusted partner in helping businesses and governments manage environmental challenges.

Clean Harbors Financial Statement Overview

Summary

Clean Harbors demonstrates strong financial performance with robust revenue growth, effective leverage management, and solid cash flow generation. The high liabilities pose a potential risk, but overall, the company is well-positioned within the industry.

Income Statement

Very Positive

Clean Harbors has demonstrated strong revenue growth over the years, with a 9% increase in 2024 compared to 2023. The gross profit margin stands at 30.97%, and the net profit margin is 6.83%, indicating healthy profitability levels for the industry. The EBIT margin is 11.38%, and the EBITDA margin is 13.57%, showing efficient operations. Overall, the company exhibits robust revenue and profit growth, contributing to its high score.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved significantly to 0.10 in 2024, reflecting reduced leverage, which is a positive sign. The return on equity (ROE) is 15.63%, showcasing effective use of equity to generate profits. The equity ratio is 34.88%, indicating a balanced capital structure. However, the high total liabilities still present a potential risk.

Cash Flow

Positive

The free cash flow growth rate is 11.60% in 2024, showing strong cash generation. The operating cash flow to net income ratio is 1.93, and the free cash flow to net income ratio is 0.86, both indicative of sound cash flow management. The company's ability to generate cash from operations supports its financial health.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.89B	5.41B	5.17B	3.81B	3.14B
	Gross Profit
1.82B	1.66B	1.62B	1.20B	1.01B
	EBIT
670.23M	612.44M	634.75M	347.89M	251.34M
	EBITDA
1.09B	989.57M	1.01B	647.73M	544.05M
	Net Income Common Stockholders
402.30M	377.86M	411.74M	203.25M	134.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
789.83M	550.80M	554.64M	534.30M	570.96M
	Total Assets
7.38B	6.38B	6.13B	5.65B	4.13B
	Total Debt
269.65M	2.49B	2.59B	2.70B	1.71B
	Net Debt
-417.54M	2.05B	2.10B	2.25B	1.19B
	Total Liabilities
4.80B	4.14B	4.21B	4.14B	2.79B
	Stockholders Equity
2.57B	2.25B	1.92B	1.51B	1.34B
Cash Flow		Free Cash Flow
345.53M	309.60M	279.19M	300.29M	232.31M
	Operating Cash Flow
777.77M	734.55M	626.21M	546.00M	430.60M
	Investing Cash Flow
-903.67M	-575.05M	-388.94M	-1.51B	-199.46M
	Financing Cash Flow
377.03M	-208.89M	-187.31M	898.25M	-88.95M

Clean Harbors Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price200.30

Price Trends

50DMA

208.11

Negative

100DMA

224.65

Negative

200DMA

232.56

Negative

Market Momentum

MACD

-3.98

Negative

RSI

46.64

Neutral

STOCH

55.83

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLH, the sentiment is Neutral. The current price of 200.3 is above the 20-day moving average (MA) of 196.46, below the 50-day MA of 208.11, and below the 200-day MA of 232.56, indicating a neutral trend. The MACD of -3.98 indicates Negative momentum. The RSI at 46.64 is Neutral, neither overbought nor oversold. The STOCH value of 55.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CLH.

Clean Harbors Risk Analysis

Clean Harbors disclosed 24 risk factors in its most recent earnings report. Clean Harbors reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Clean Harbors Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXPD	75 Outperform	$14.91B	18.94	35.12%	1.35%	13.98%	14.29%
BWXT	73 Outperform	$9.23B	32.91	28.00%	0.96%	8.31%	14.74%
RTO	71 Outperform	$10.90B	28.07	7.44%	2.34%	3.96%	-17.48%
CLH	70 Outperform	$10.45B	27.00	16.69%	―	8.89%	6.76%
MLI	68 Neutral	$8.39B	14.27	23.67%	1.12%	10.19%	0.35%
CWST	64 Neutral	$7.04B	508.47	1.05%	―	23.15%	-50.55%
Sector *	62 Neutral	$7.50B	12.89	3.19%	3.38%	3.64%	-14.27%

* Industrials Sector Average

Performance Comparison

CLH

Clean Harbors

200.30

5.66

2.91%

CWST

Casella Waste

115.08

19.44

20.33%

EXPD

Expeditors International

110.15

-5.16

-4.47%

MLI

Mueller Industries

74.12

23.00

44.99%

BWXT

BWX Technologies

103.25

10.30

11.08%

RTO

Rentokil Initial

22.49

-5.11

-18.51%

Clean Harbors Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -11.65% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance with record revenue and cash flow, significant growth in the Environmental Services segment, and successful strategic initiatives like the Kimball incinerator launch and PFAS solutions. However, the SKSS segment faced challenges with decreased revenue and EBITDA, and there were some disruptions due to the California wildfires.

Highlights

Strong Consolidated Results

Delivered strong consolidated results in Q4, beating Street expectations with a 10% EBITDA growth for 2024.

Record Revenue and Cash Flow

Achieved record revenue, adjusted EBITDA, and adjusted free cash flow in 2024.

Environmental Services Segment Growth

Environmental Services (ES) segment capped a record year with a 9% increase in revenue and 11% adjusted EBITDA growth.

Successful Launch of Kimball Incinerator

Completed and commercially launched the Kimball, Nebraska incinerator, increasing North American capacity by 12%.

PFAS Solutions and Testing

Launched Total PFAS solution and conducted successful PFAS incineration testing, expecting significant market growth.

Strong Cash Position and Low Leverage

Ended the year with a healthy cash balance of $790 million and low leverage, enabling strategic growth opportunities.

Lowlights

Challenges in Safety-Kleen Sustainability Solutions (SKSS)

Revenue and EBITDA decreased year over year in Q4 due to soft demand and lower pricing in the base oil and lubricants market.

Impact of California Wildfires

California wildfires caused disruptions to branch collections, although no operating branches were affected.

Higher Corporate Costs

Q4 results were offset by higher corporate costs, including increased labor, benefits, and insurance costs.

Company Guidance

During the Clean Harbors fourth quarter and full year 2024 financial results conference call, the company reported a consolidated EBITDA growth of 10%, with full-year revenue growth of 11% and adjusted EBITDA margins exceeding 25%. The Environmental Services (ES) segment experienced a 9% increase in revenue, contributing to an 11% adjusted EBITDA growth. The segment's field services revenue grew by 47%, driven mainly by organic growth and the acquisition of HEPAKO. The company also launched a new incinerator in Kimball, Nebraska, increasing North American capacity by 12%. Safety-Kleen Environmental Services (SKSS) faced a challenging commodity pricing environment, leading to a decrease in revenue and EBITDA year-over-year. However, aggressive pricing actions were taken to counteract these challenges. The company ended the year with a net debt to EBITDA ratio just under two times and expects 2025 adjusted EBITDA to be in the range of $1.15 billion to $1.21 billion, with adjusted free cash flow estimated between $430 million and $490 million.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.